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  1. #2971
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by Joshuatree View Post
    Contrary opinions are needed for balance and to temper the uprampers and love fest that had people buying at higher prices not so long ago. A few apologies needed on here.
    I think you are getting yourself confused here about OCA's performance. Its mostly a sector rerating downwards that has caused the SP correction and in fact if we look at the range movements in recent months we see declines from the high water point to today's price as follows which clearly show OCA as THE RELATIVE OUTPERFORMER:-
    RYM $14.09 now $10.48 down 26% (Only one dog had the courage to bark that it was clearly overpriced at $14 and anyone who acted on that should be very thankful)
    SUM $8.00 now $6.11 down 24%
    MET $6.51 now $5.17 down 21%
    OCA $1.23 now $1.04 down just 15%.
    Sure ARV hasn't gone down as much but its woeful SP appreciation since OCA listed of just 3% speaks for itself in terms of its bottom of the pack ranking.

    Further, looking before the recent SP correction and over the full period since OCA listed, OCA has outperformed all its peers in terms of SP appreciation and gross dividend yield.

    I think the people who have clearly called this the best sector investment have been bang on the money and anyone that listened to their well researched posts should be most appreciative because this company has significantly outperformed ALL its peers since listing.
    Further, the market overall has been quite weak these past few months. Anyone thinking investing is always a nice straight line upwards in the SP has had a reality check but that's no big deal for anyone holding for a decent length of time.

    There's lots of grumpy people feeling bad about how their various shareholdings have gone in recent months but lets not get carried away with the blame game and finger pointing !
    Last edited by Beagle; 31-01-2019 at 09:41 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  2. #2972
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    Quote Originally Posted by Scrunch View Post
    While there's a few posters that won't like to hear it, the Bull's got an exceptionally good point, but possibly not the one he intended to make. One of the interesting facts about the sector is that the ratio Income tax / Net Profit before tax is very low and sometimes its even negative. For example OCA had an effective tax rate over the last two years of 5.3% and -1.4%. Last year they reported a $76m pre-tax profit and taxation increased the profit by $1m!! The very low effective tax rates in the sector will not be lost on the IRD, but I believe is the correct result from the current tax legislation. IRD would not be doing their job correctly if they did not put forward recommendations to get tax free capital gains reclassified as income but it requires policy changes.

    If the tax legislation is changed, the effective tax rate could return to circa 28%. That's a big hit to EPS for all the retirement village companies including OCA but some of this hit is likely to be factored into the current prices and is a cause of recent share price weakness.

    Could the legislation be changed in the next 1 to 5 years - yes
    Could Labour win an election campaining for a comprehensive capital gains tax? - Its unlikely but not quite an impossibility (Brexit and Trump winning both also looked unlikely but happened)
    Would it be political suicide to make tax changes so that retirement villages paid capital gains taxes but size thresholds exemptions mean most households were outside the net - no

    The banks got done for several billion dollars when the tax rules changed and the structured finance deals they were doing were suddendly deemed not to generate tax free income. Tax rules/interpretations can, and do change. The similarity with the retirement village sector is that these deals were resulting in effective tax rates well below the nz company tax rate. Different causes exist for OCA and the others, but the same outcome exists of a low effective marginal tax rate.
    https://www.nzherald.co.nz/business/...ectid=10617445

    Disc - Hold one of the retirement companies and the wife has OCA shares.

    Thank you. Food for thought..

  3. #2973
    Legend peat's Avatar
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    thanks for calculating those Roger.

    this chart would appear to show things are a bit closer than that.

    OCAvsSUM%.JPG

    I guess the difference is explained by taking the highest share price as the beginning point vs taking relative performance from an arbitrary time in the past eg 2 years in this case. I'm am thinking 2 years covers all of OCA's listed time.



    Heres one for RYM

    OCAvsRYM%.JPG

    Quite similar really. Ryman is increasingly volatile these days so relative performance could jump around as well. Whereas I would think OCA has a low beta
    For clarity, nothing I say is advice....

  4. #2974
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Maverick View Post
    Relax Seaweed - You would have to pry them out of my dead , clenched fist....and as you can see I ain't dead yet.
    Quote Originally Posted by Maverick View Post
    Yep , sounds pretty right to me Beagle.
    My ball park expectations of FY 2019 are as follows
    FY2018 profit 52.1 mill
    Plus 2% inflation increase on the care side of business +1 mill
    Plus margin on new builds +16.1 mill
    Plus increased DMF of new stock (most of this won`t be fully realised for several years though- but i figure there will be some increase in DMF fees is warranted from increasing ORA`s done in recent years) +4.3 mill
    Total annual profit = $73.6 million =11.7 cps

    So a bit more than yours Beagle , but you're probably closer by not including so much unrealised DMF that I`have. (+ 4.3 mil equates to 0.7 cps)
    At a forward PE of 13 makes the share price then worth $1.52 ( it's no surprise this is 25% higher than the $1.20 it was when I did these workings)
    That has been historically about what most retirement stocks have increased by YOY.
    Still hoping for $73.6m this year?
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  5. #2975
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by peat View Post
    thanks for calculating those Roger.

    this chart would appear to show things are a bit closer than that.

    OCAvsSUM%.JPG

    I guess the difference is explained by taking the highest share price as the beginning point vs taking relative performance from an arbitrary time in the past eg 2 years in this case. I'm am thinking 2 years covers all of OCA's listed time.



    Heres one for RYM

    OCAvsRYM%.JPG

    Quite similar really. Ryman is increasingly volatile these days so relative performance could jump around as well. Whereas I would think OCA has a low beta
    Thanks Peat. Isn't it interesting how close the share prices trend over time. Pretty strong correlation there !
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  6. #2976
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    Quote Originally Posted by Scrunch View Post
    If the tax legislation is changed, the effective tax rate could return to circa 28%. That's a big hit to EPS for all the retirement village companies including OCA but some of this hit is likely to be factored into the current prices and is a cause of recent share price weakness.
    They could do that, and for a lot of reasons that sounds like a good economic choice. However, lets say they do take a big chunk of profits out of the retirement sector. Then lets suppose private enterprise no longer sees it as an attractive proposition. With the big baby boomer bubble heading for health care who is going to pick up the slack if private enterprise doesn’t?

    I am assuming there are a few bean counters in Government with enough smarts to know the ramifications of wringing the profits out of this sector. It’s not just numbers it is a bunch of people we are talking about - people who generally vote as well, which adds another knife to twist.

  7. #2977
    Senior Member hardt's Avatar
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    ANALYST E

    OCA
    MKT CAP 640m @1.03
    Underlying NPAT FY19E 45-50m
    Payout 64% - unfranked
    Debt 230-250m

    ARV
    MKT CAP 540m @1.30
    Underlying NPAT FY19E 43-48m
    Payout 55% - 80% franked
    Debt 110-120m

    Posted without my opinion.
    Last edited by hardt; 01-02-2019 at 10:46 AM.

  8. #2978
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    Quote Originally Posted by hardt View Post
    ANALYST E

    OCA
    MKT CAP 640m @1.03
    Underlying NPAT FY19E 45-50m
    Payout 64%
    Debt 230-250m

    ARV
    MKT CAP 540m @1.30
    Underlying NPAT FY19E 43-48m
    Payout 55%
    Debt 110-120m

    Posted without my opinion.
    "its a matter of common sense really"
    But Roger says OCA is waay cheaper than ARV?

  9. #2979
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    Quote Originally Posted by Timesurfer View Post
    They could do that, and for a lot of reasons that sounds like a good economic choice. However, lets say they do take a big chunk of profits out of the retirement sector. Then lets suppose private enterprise no longer sees it as an attractive proposition. With the big baby boomer bubble heading for health care who is going to pick up the slack if private enterprise doesn’t?

    I am assuming there are a few bean counters in Government with enough smarts to know the ramifications of wringing the profits out of this sector. It’s not just numbers it is a bunch of people we are talking about - people who generally vote as well, which adds another knife to twist.
    If that would happen share holders would get imputation credits with their dividends, this would to some degree lessen the severity of the impact of tax changes. More so for companies which may a higher percentage of dividends compared to there profits.

  10. #2980
    Speedy Az winner69's Avatar
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    Still trying to ‘reconcile’ in my mind the words ( ie hype) with the numbers so had another look through the latest presentation
    http://nzx-prod-s7fsd7f98s.s3-websit...805/294060.pdf

    Presentation reminded me of a saying often said in financial circles "A great deal more fiction is written in Powerpoint than in Word”
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

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